What if it's 5 people? 10? What if instead of many huge buses like today it's 5x as many smaller buses?

You can't just have buses stopping randomly everywhere, it doesn't scale.

The assumption is that a "waymo bus" would be hailed by an app and the service would plan routes on demand. In such case, bus stops would be needed only in busy areas or in places where it would be dangerous to stop.

This is based on the observation that people, including police, tolerate taxi drivers stopping at places where it's technically illegal.